Highlights
BHARTI AIRTEL ACQUIRES TATA’S CONSUMER TELECOM BUSINESS
“The merger is on a debt-free and cash-free basis,” said
the companies. In effect, Bharti will get the Tata consumer
mobile business virtually for free. However, Airtel will have
to assume a portion of Tata’s unpaid spectrum payment
liability, which is estimated to be `2,000 crore, but has to be
paid on a prolonged basis.
The Tata Group quit the highly-competitive mobile telecom
sector after nearly 15 years, merging its loss-making mobile
business, consisting of Tata Teleservices Ltd and Tata
Teleservices Maharashtra Ltd, with Bharti Airtel.
As a part of the deal, the Tatas who are burdened with a
debt of over `40,000 crore, will clear liabilities and dues.
Following in the footsteps of Vodafone and Idea - the
second and third largest telecom companies, respectively,
– it agrees to merge to become No. 1 with a combined
subscriber base of over 400 million, overtaking Airtel. In the
last 5 years, this is the 7th acquisition for Airtel and will gain
access to around 180 MHz of spectrum spread across 850
MHz, 1800 MHz, and 2100 MHz bands. Importantly, it will
add Tata’s nearly 40 million mobile subscribers to its own
base of 280 million customers, taking it comfortably past
the 300-million mark.
“We believe today’s agreement is the best and most optimal
solution for the Tata Group and its stakeholders. Finding
the right home for our longstanding customers and our
employees has been the priority for us,” Tata Sons chairman
N Chandrasekaran said.
“We have evaluated multiple options and are pleased to
have this agreement with Bharti.” Bharti Airtel chairman
Sunil Mittal said.
“On completion, the proposed acquisition will undergo
seamless integration, both on the customer as well as the
network side, and further strengthen our market position in
several key circles,” he said, summing that addition of Tata’s
spectrum makes “an attractive business proposition.”
It is believed that the deal states the beginning of a bond
between the two corporates which could stretch and
heighten businesses such as DTH, enterprise and undersea
cable. The joint statement from the companies made a
reference to this, “Tata and Airtel will work together to
further explore other areas of cooperation, that will be value
added for both groups.”
GOVERNMENT TO SELL 51% STAKE IN PAWAN HANS
On October 13, bids from private companies, including
foreign ones, were invited by the government, to buy out its
entire 51 percent stake along with management control in
helicopter service operator, Pawan Hans Ltd.
The Miniratna PSU is under the administrative control of the
civil aviation ministry and the remaining 49 percent stake is
held by oil behemoth, ONGC.
The government asked private players to submit the bids by
December 8, in a global invitation for expression of interest.
“The government proposes to disinvest its entire equity
shareholding of 51 percent in Pawan Hans Ltd by way of
strategic disinvestment to investors, along with transfer of
management control,” it said while inviting bids.
The Department of Investment and Public Assets
Management (DIPAM) has already lined up a horde of PSUs
for strategic disinvestment. While expression of interest
(EoI) from bidders was asked for four PSUs on October 12,
the same for Pawan Hans was issued on October 13.
Of the lot in question, the government plans to sell its entire
stake in Hospital Service Consultancy Corporation (HSCC),
Engineering Projects (India) Ltd (EPI) and National Projects
Construction Corporation (NPCC) to a similarly-placed CPSE.
Besides, Bridge and Roof Co will be sold to a private player.
The government plans to raise `15,000 crore via strategic
sales in the current fiscal out of its total disinvestment target
of `72,509 crore.
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| L egal E ra | N ovember 2017
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